The TANF Emergency Fund and Domestic Violence March 1, 2010 Elizabeth Lower-Basch Senior Policy Analyst

Personal Responsibility and Work Opportunity Reconciliation Act replaced AFDC with TANF – “welfare reform” Welfare caseloads dropped dramatically. More low-income single mothers working, but also increasing share not working, not receiving welfare. Block grants fixed at $16.5 billion a year – purchasing power has eroded by ~30 % since Share of TANF block grant spent on cash assistance declined sharply.

States will receive 80 percent of increases in spending in one or more of three areas:  Assistance  Non-recurrent, short-term benefits  Subsidized employment Each state can receive up to 50% of block grant over two years. Total pool of $5 billion. Expires on September 30,

Can only qualify under assistance if caseload has risen vs. 07 or 08 Nationally, TANF caseload has risen by ~7% vs. 29% increase in SNAP receipt. CBPP: 26 states “minimally responsive;” 11 “moderately responsive;” 14 states grew by 15% or more. Assuming a state qualifies based on caseload increases, ECF will pay for 80 percent of benefit increase for TANF recipients. 4

Energy assistance – prevent utility shutoffs. Homelessness prevention – first and last month’s rent, security deposit, moving costs. Domestic violence services, car repairs, legal aid, dentures One-time payments to broad population of needy families (eg. New York’s back to school payment to all TANF or SNAP families) Refundable EITC 5

Emergency shelter Short-term counseling Short-term medical treatment, including dental work or replacement eyeglasses Legal services and court-related costs Help in applying for TANF or other benefits Replacement locks Moving costs, including security deposits Purchase of clothing or household goods 6

HHS has said that employers’ costs of supervising and training participants can be deemed as equal to 25% of wage costs – no state $$ required Can be Transitional Jobs for individuals with barriers to employment.  Combines work, skill development, and supportive services  7

Can deem hours of participation for 6 months, rather than having to document them every week – less paperwork for states. Much better financially for the participant – earnings count towards tax credits. Generally, more like real work situations – need to be timely, deal with supervisors and coworkers, can learn skills. Not pushing a broom in the park. 8

One of largest programs in the country – goal of placing 10,000 participants by September. Up to 12 months of subsidized employment at $10/hour per hour with non-profit and public agencies and 6 months with private entities TANF Emergency Fund pays the full cost of wages; employers’ costs of supervising and training are counted as the 20% match. Targets CalWORKS recipients, parents in DV shelters, foster care youth. 9

Work participation rates only apply to recipients of “assistance.” Nonrecurrent short-term benefits and work subsidies are not “assistance.” Recovery act included a “hold harmless” – states can use previous caseload reduction credit if caseloads increase. Existing regulations allow for “reasonable cause” for failure to meet rates in recession. 10

11 Combined MOE/TANF spending Must be an increase over comparable quarter in FY 07 or 08 Can be redirected from other TANF categories Can be third-party spending claimed as MOE

Can be cash or in-kind Must meet definition of “expenditure” Must benefit members of “eligible families” Third party must give state permission Funds can not come from another federal program, and can not have been used for matching or MOE requirement of other program Employer costs of supervision and training can be counted. 12

Reimbursement State increases spending on countable activities by $5 million State applies for and receives $4 million from Emergency Fund. Funds received can be spent on any allowable TANF activity, and can be used after Sept Advance Funding State projects that it will increase spending on countable activities by $5m. State applies for and receives $4 million from the Emergency Fund. Full $5 million ($4 million from EF + $1 million of MOE) must be spent on countable activity by Sept

34 states have received $804 million based on increased cash assistance caseloads. 19 states have received $367 million based on increased spending in short-term non-recurrent assistance. 22 states (plus the District of Columbia) have received $138 million based on increased spending on subsidized employment. 14

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Funds must be expended, not just obligated by September 30, to be reimbursed. LA is planning on phasing out subsidized jobs program in May unless there is an extension. President Obama’s budget calls for extending program for one year, providing extra $2.5B, and 100% reimbursement of subsidized jobs. HR 4564 has 57 cosponsors. Extension should happen sooner rather than later so states can make plans: UI/COBRA extension is best vehicle. 16

17 For more information: Elizabeth Lower-Basch CLASP th St, NW Suite 400 Washington, DC The TANF Emergency Fund: A New Resource for Domestic Violence Programs